How To Interpret Crisis Between Qatar And Saudi Arabia’s Allies – Analysis
By Giancarlo Elia Valori*
The crisis between Qatar and much of the new “Sunni” NATO – as some US media already call it today – consists in a formal series of 13 requests that Saudi Arabia, Egypt, Yemen, the Emirates, Bahrain, and even Mauritius, have made – as an ultimatum – to Qatar:
1) to break off any diplomatic and economic relations with Iran; 2) to immediately close the Turkish military base near Doha and, anyway, put an end to military cooperation between Qatar and Turkey; 3) to immediately close Al Jazeera, an old TV created on the ruins of the BBC broadcasting in Arabic and later de facto monopolized by the Muslim Brotherhood; 4) to make the members of the Qatari Royal House no longer fund networks such as Arabi21, RASSD, Araby al-Jadid and Middle East Eye. “Araby al Jadeed” is a brand-new all-news network created in March 2014 and organized by Azmi Bashara, a former member of the Israeli Parliament, broadcasting from London, Beirut and Doha, with 150 employees, while the above stated Middle East Eye is currently led by David Hearst, formerly foreign editor-in-chief of the London Guardian.
The network Middle East Eye has been blocked by the Saudi authorities and by the other Emirates.
The other requests are the following: 5) Saudi Arabia has asked Qatar to stop funding groups or individuals designated as terrorists by Saudi Arabia, the United Arab Emirates (UAEs), Bahrain and Egypt, as well as providing data and information.
Well done. Some terrorists designated as such by Saudi Arabia are defined in the same way also by the West. It is the case of Hajjaj al Azmi, a Kuwaiti citizen who often lives in Doha. In the list of the 13 requests also the “Benghazi Defense Brigades” are mentioned, namely a militia created in June 2016 to oppose the forces of Khalifa Haftar’s Operation Dignity.
The Benghazi Defense Brigades cooperated with the ISIS “Caliphate” in its operations at Suq al-Hout and in Sirte.
The Saudi list includes Abdullah Bin Khalid al-Thani, former Interior Minister of the Emirate, linked to the 9/11 jihadist operations.
However, let us be honest and face it. Prince Turki bin Faisal was the leader of Saudi intelligence services for 23 years since 1979 until ten days before the 9/11 attack. Is it by mere coincidence?
According to well-known data, Nawaf bin al-Hamzi and Khalid al-Mindar, who both arrived in the United States for the 9/11 attack, were managed by the Saudi intelligence services.
Al-Bayoumi, selected by the FBI exactly as a Saudi agent, had huge funds in the United States granted by Saudi Arabia through the company Dallah Alco.
Al-Bayoumi was connected with Fahad al-Thumairy, Director of the Saudi Ministry for Islamic Affairs. However, let us not focus on the 29 pages taken from the US report on Saudi Arabia and the 9/11 attack.
This would get us very far and would shed light on many facts and events that are currently taking place, not only in the Middle East.
Strategically, the issue of the relationship between Saudi Arabia and Islamic terrorism has been long lasting: the jihad – which the West has foolishly favoured – has become the primary geopolitical agent throughout the Greater Middle East and also in the rest of the world.
This was solely Westerners’ fault since they had every chance to force Saudi Arabia, the Emirates, Iran, the Lebanon, Iraq and all the other Islamic regional players in the Middle East to be more reasonable and become somewhat milder as to the “sword jihad”.
Nevertheless, Quos Deus perdere vult, dementat.
As things stand now, without a change there is no solution for this situation. We will be confronted with the remote-controlled jihad and later we will ask those maneuvering it for money to be rescued from an economic crisis that is also caused by the crazy geopolitics of the whole West.
Currently Saudi Arabia invests approximately 20 billion US dollars for infrastructure in the United States, as well as six billions for 150 Black Hawk helicopters to be used in the its kingdom.
If all goes well, at the very quick pace recently imparted to reach economic diversification, Saudi Arabia will go ahead according to its program “Vision 2030” by selling, at first, Saudi Aramco on the market.
This is another important fact to understand today’s events.
Nevertheless the project “Vision 2030” also proposes measures which may still generate tension, such as the increase in tariffs, rates and taxes, although with a fall in the unemployment rate from 11.6% to 7%.
Furthermore Saudi Arabia envisages primary support for small and medium-sized enterprises (SMEs).
The Saudi public Fund devoted to SMEs, namely Musharakah, has already 4 billion Saudi riyals, equal to approximately 6 billion US dollars.
In short, Saudi Arabia wants to rapidly diversify its oil-dependent economy and grow up to becoming the 15th global economy in 2020.
Special Economic Zones will also be created and foreign direct investment (FDI) will rise from the current 3.8% to 5.7% .
According to Al Saud’s plans, the private sector is expected to reach 65% of GDP as against the current 45%.
If Saudi Arabia does not bring the whole Peninsula and the Sunni world up to speed according to this program, “Project 2020” is clearly doomed to failure. Another rational motivation for the anti-Qatar diktat.
Let us now move to request 6.
Against this background, Saudi Arabia asks Qatar to “break off relations with Hezbollah, al-Qaeda and the “Caliphate”.
Let us analyze data.
In 2008, the leader of Qatar, Emir al-Thani, held a meeting between all parties present on the Lebanese political scene, by showing clear support for the Shiite movement of the “Party of God” and its allies, especially for the many Iranian foundations operating in Beirut.
It is worth recalling that exactly in 2008, the Sunni Lebanese leader, Rafik Hariri (whose economic fortune had started in Saudi Arabia), was killed, probably by a joint operation of some Shiite countries.
Recently the Qatari Emir has also spoken of Hezbollah as a “resistance movement”, adding that it is “not wise” to oppose Iran.
Al-Thani has also said that such news were manipulated, but obviously this just exacerbates the situation.
The issue, however, is not only geopolitical, but also economic.
Qatar is a relatively small, but not irrelevant oil producer, with 620,000 barrels a day. However, it is the first natural gas supplier in the world and – according to 2016 data – it exports 77.2 million tons mainly to the East.
However, why is there no OPEC for natural gas, which would avoid the politicization of the search of market shares between producers?
Meanwhile, the United States is becoming the largest natural gas producer in the world, with a 2016 extraction level equal to 23%, while in 2001 the share of shale gas in North American extraction was a mere 1%.
Hence it is obvious to imagine how prices and market shares will change with this mass of liquid gas in Europe and Asia. It is also easy to imagine how the economies depending on natural gas in the Middle East would end up if the United States became more aggressive on the global liquid gas markets.
European markets’ net dependence on African and Middle East gas imports and rigid pricing of liquid gas on Asian markets, as well as the huge investment needed for extraction and transport infrastructure, are all factors which – unlike what happened for oil – prevent the creation of a global natural gas market protected by a single producer cartel.
This is why there is no OPEC for gas and this is particularly the reason why the oil exporters floundering in the financial crisis want to back the large gas extracting countries into a corner and later possibly expropriate them.
Hence Saudi Arabia’s and its allies’ current crackdown on Qatar poses a major economic problem for al-Thani’s Emirate, considering that all the ships flying the Qatari flag have been forbidden to dock in the Saudi and Emirates’ oil and gas terminal of Fujariah in the Persian Gulf.
For the time being the Emirate “punished” by Saudi Arabia has reassured its customers, especially the Asian ones and the major one, namely the Japanese Jera buying Qatari gas with long-term contracts, about the regularity of supplies, but nothing prevents delays and additional costs from occurring, which will soon affect Italy as well.
Furthermore the oil price fall had created a 98 billion US dollar deficit in Saudi Arabia’s public finances.
In a logic of looting, which Quran rules permit, the easiest solution is to put a strain on the richest opponent.
However, besides creating debt securities, Saudi Arabia will sell significant shareholdings of its oil companies, but above all of Saudi Aramco – and this is a central factor, as already mentioned.
Economic diversification is therefore an immediate need for Saudi Arabia and this explains most of the current internal conflicts among the “Seven Sudayri” of the Al Saud family, who have been ruling and deciding the fate of much of the Arabian peninsula since the time of the Wahhabi uprising.
However let us continue with the requests made by Saudi Arabia and its allies to Qatar.
Again to continue the discussion of “request” 5 to Qatar, we are talking about 59 individuals and 12 institutions which, according to Saudi Arabia, support, organize and fund terrorism.
The list of organizations obviously include the charities linked to al-Thani’s family, but there are also Saraya al-Ashtar, an organization of “occasional terrorists” linked to Hezb’ollah in Bahrain; the “February 14 Coalition”, again operating in Bahrain in favor of the Shiite majority in the country; the “Resistance Brigades”, again active in Bahrain; Saraya al-Mukhtar, a Shiite League operating in the al-Khalifa’s kingdom, and finally Harakat Ahrar Bahrain.
Judging from this list, it seems that Daesh-Isis is not a terrorist organization and the same holds true for al-Qaeda.
That is true, but they are Sunni organizations.
Moreover, a few days ago the British media published very compromising documents on the Saudi leaders’ funding to all jihadist terrorist organizations.
Again according to the latest data, the money spent by the Saudi ruling class to spread Wahhabism (and Salafism) in the world – both ideological foundations of contemporary jihad – is currently at least 5.2 billion US dollars.
Hence the oil powers are brutally demanding Qatar, the world’s gas leader, to extradite “terrorists” (but only the Shiite ones) and not interfere in domestic affairs or grant citizenship to Saudi, Egyptians and Emirates’ citizens who are wanted in their countries of origin.
These are requests 7 and 8 of the cahier de doleances issued by Saudi Arabia and its allies, also supported by the short-sightedness of the US intelligence services.
However, it is now well-established that in 1996 the Qatari royal family hosted and protected Khalid Sheik Mohammed, thus saving him from a US arrest warrant issued against him who is considered one of the “masterminds” of the 9/11 attack.
It has also been ascertained that a member of al-Thani’s family provided a safe cover in Doha to Al Zarkawi, the founder of al-Qaeda in Iraq, during his many transfers to and from Afghanistan.
Later the Iraqi Prime Minister, al-Maliki, openly accused Qatar of backing al-Baghdadi’s Caliphate.
However, why is Qatar supposed to support Daesh-Isis, mainly funded by its Saudi arch-enemy?
Simply because the Syrian-Iraqi Caliphate perpetrated at least three attacks on the Saudi territory in 2015, 2016 and 2017, for which it duly claimed responsibility.
As to request 9, Saudi Arabia and its allies – supported by the United States that found out that the country organizing terrorists is only the Shiite Iran – oblige Qatar to suspend any aid to their internal political enemies hosted by the Qatari Emirate and immediately inform the Sunni authorities (indeed Qatar, too, is strictly Sunni).
Moreover, Saudi Arabia and its allies ask Qatar to align itself with Saudi Arabia and with the other signatories of the diktat list at “economic, political, social and military” levels, following the indications of the Treaty reached between Qatar and Saudi Arabia in 2014.
In particular, the above mentioned Treaty regards Qatar’s end of money and weapon supplies, as well as logistical support, to groups and individuals hostile to Saudi Arabia in Yemen, Egypt and in the various Gulf Countries, obviously including Saudi Arabia.
The 2013 and 2014 agreements were secret agreements, but the topic is primarily the fight against the Muslim Brotherhood, which is now secretly operating in Saudi Arabia and throughout the Gulf – and listens on al- Jazeera the sermons of Shaykh al-Qaradawi, the most authoritative theoretician of the Muslim Brotherhood.
It is worth recalling that it was exactly a Saudi university professor of the Muslim Brotherhood who radicalized Osama bin Laden who, until then, had been a cheerful Westernized young Saudi tycoon.
The list of the thirteen requests ends with two recommendations: firstly, to undergo monthly supervision during the first year and, for the following ten years, to be monitored, again on a yearly-basis, and anyway decide on the list of the thirteen requests within ten days.
Obviously Qatar, which so far has not accepted the thirteen requests – has immediately turned to Turkey, governed by the AKP, a party born from a rib of the Muslim Brotherhood, and to Iran.
As is well-known, the United States initially supported the Saudi requests – although it later remembered that its central command for the whole Middle East was in Qatar, at the al-Udayd base.
If Qatar loses its tug-of-war with Saudi Arabia and its allies, its large financial reserves will be hoarded by Saudi Arabia to back its project for stabilizing State budgets and rapidly achieving economic diversification, which is at the core of the new King Muhammad al-Salman’s policy line.
Qatar has a sovereign fund of 355 billion US dollars and owns 30 billions worth of securities and shares, as well as an unknown, but definitely huge amount of other investments outside the Emirate.
Moreover, the Saudi royal family pays a high price – with a public debt that would have forced Saudi Arabia into default by 2018 – for the huge funds and loans granted to terrorist organizations in Syria, Yemen and Iraq – all jihadist militias now out of the new balance of power and obviously defeated by the new connection between Russia, Iran, Syria and, in the future, Turkey.
Furthermore, in an already problematic situation, the bloody suicide rush to forcedly reduce oil prices – mainly targeted against the US shale oil – has depleted the public finances and the private incomes of the Wahhabi Kingdom.
Hence, with his victory, President Trump – who played many of his electoral cards precisely on the North American economic recovery to be funded with “unconventional oil and gas” – as shale is officially called – has unintentionally triggered off a tough internal power struggle within the Al Saud family.
The first faction wants to rebuild an effective relationship with Russia and China, so as to stabilize prices and, in the long run, stop pegging the Saudi oil to the US dollar, which will shortly be only the financial instrument of the globalization of North American shale oil – a direct competitor of the Saudi one.
On the contrary, the opposite faction wants to preserve the already strong relationship between Saudi Arabia and the United States, so as to use the US economy as a carrier for the increasingly necessary and quick diversification of the Saudi economy, which is still heavily oil-dependent.
A factor linked to this new US-Saudi bilateralism is also the Saudi pressure against the New Silk Road of China, which is currently the number one enemy of US geopolitics and that the pro-American Saudis want to drive away from all the Gulf countries.
Conversely, it is almost useless to note that Iran has always been an essential passage point of the One Belt and One Road initiative (OBOR) designed by China.
It is also worth recalling it was Qatar, jointly with Iran, to open the first yuan “exchange centre” throughout the Middle East on April 14, 2015.
In addition to the above-mentioned monetary exchange and clearing centre for the Chinese and Middle East currencies – and it should be noted that yuan-denominated oil contracts between China and Iran are already in place – the Industrial and Commercial Bank of China also operates in Qatar.
If the yuan (and the ruble) became the new benchmark for gas and oil, the US dollar good days would be over since it could no longer lay onto the US-dollar denominated international trade the imbalances and asymmetries of public debt (which, including households’ and companies’ debt, accounts for 345% of the US GDP) and of its trade deficit.
“The dollar is our currency, but your problem” as a FED Governor said to his European counterparts.
Meanwhile, the new Saudi king, Muhammad bin Salman, is planning and designing a new 2 trillion US dollar sovereign fund, with a view to putting an end to the Saudi oil-dependence “within the next twenty years.”
Again according to the pro-American faction of the al-Saud family, the new sovereign fund is expected to invest half of its capital abroad, obviously without ever affecting Aramco, the world’s first oil producer and second holder of world reserves.
Said faction does not show any particular problem with oil price fluctuations, as has already demonstrated by trying – in vain – to push the US shale oil out of the market.
If the oil price increases, there will be more money available to Saudi Arabia for stepping up economic diversification. Even if the oil price decreases there would be no problem: the Saudi oil has the lowest unit extraction cost and the country will always be in a position to sell its products on the fastest-growing and most liquid market in the world, which is currently the Asian one.
Once again Qatar’s primary role in the Japanese and Chinese energy system is very annoying for Saudi Arabia.
Everything will change in the Middle East when, at the end of hostilities in Syria, Israel shall face a number one enemy, namely Iran, which is currently strengthened by the new balance of power prevailing in Syria (and in the Lebanon) and shall also come to terms with what is increasingly becoming the “lesser evil”, namely Saudi Arabia’s Wahhabism.
About the author:
*Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “La Centrale Finanziaria Generale Spa”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group and member of the Ayan-Holding Board. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title of “Honorable” of the Académie des Sciences de l’Institut de France.
This article was published by Modern Diplomacy